Hold SRF: target of Rs 2,800: ICICI Securities

ICICI Securities research report on SRF

SRF`s chemical business has surprised positively in Q4FY25 with a strong show in specialty chemicals and ref-gas; also, SRF is upbeat on demand outlook/orderbook for FY26. Ref-gas revenue should benefit from higher production with commissioning of AHF plant which was a bottleneck in FY25. It expects ref-gas prices to sustain at higher levels of exit-FY25. Specialty chemicals is likely to benefit from improvement in demand, commissioning of AIs and new product launches.

Outlook

Fluoropolymers business to show traction with increased off-take of value-added grade and start of new fluoropolymers facility. SRF has retained chemical business EBIT guidance at 25-26%. Our EPS has been tweaked by +2/3% for FY26/27E with SoTP-based revised TP of INR 2,800 (from INR 2,715) as we raise non-chemical segment EBITDA multiple by 1x each. Maintain HOLD.